GLADSTONE LAND Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share data) (Unaudited) June 30, 2021 December 31, 2020 ASSETS Real estate, at cost $ 1,165,366 $ 1,095,439 Less: accumulated depreciation ( 60,402 ) ( 49,236 ) Total real estate, net 1,104,964 1,046,203 Lease intangibles, net 5,038 3,732 Cash and cash equivalents 66,789 9,218 Other assets, net 24,843 8,136 TOTAL ASSETS $ 1,201,634 $ 1,067,289 LIABILITIES AND EQUITY LIABILITIES: Borrowings under lines of credit $ 100 $ 100 Notes and bonds payable, net 627,408 623,961 Series A cumulative term preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 0 shares authorized, 0 shares issued or outstanding as of June 30, 2021 ; 2,000,000 shares authorized, 1,150,000 shares issued and outstanding as of December 31, 2020, net — 28,594 Series D cumulative term preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of June 30, 2021 ; 0 shares authorized, issued, or outstanding as of December 31, 2020, net 58,482 — Accounts payable and accrued expenses 10,806 9,081 Due to related parties, net 1,994 2,484 Other liabilities, net 21,530 19,279 Total liabilities 720,320 683,499 Commitments and contingencies (Note 7) EQUITY: Stockholders’ equity: Series B cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 6,456,065 shares authorized, 5,956,065 shares issued and outstanding as of June 30, 2021 , and December 31, 2020 6 6 Series C cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 25,999,862 shares authorized, 2,029,455 shares issued and outstanding as of June 30, 2021 ; 25,999,862 shares authorized, 1,088,435 shares issued and outstanding as of December 31, 2020 2 1 Common stock, $ 0.001 par value; 63,944,073 shares authorized, 30,478,064 shares issued and outstanding as of June 30, 2021 ; 65,544,073 shares authorized, 26,219,019 shares issued and outstanding as of December 31, 2020 30 26 Additional paid-in capital 549,123 440,470 Distributions in excess of accumulated earnings ( 68,533 ) ( 55,213 ) Accumulated other comprehensive loss ( 1,344 ) ( 1,500 ) Total stockholders’ equity 479,284 383,790 Non-controlling interests in Operating Partnership 2,030 — Total equity 481,314 383,790 TOTAL LIABILITIES AND EQUITY $ 1,201,634 $ 1,067,289 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In thousands, except share and per-share data) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 OPERATING REVENUES: Lease revenue, net $ 16,893 $ 12,638 $ 32,927 $ 27,918 Total operating revenues 16,893 12,638 32,927 27,918 OPERATING EXPENSES: Depreciation and amortization 6,285 3,843 12,336 8,100 Property operating expenses 906 717 1,336 1,238 Base management fee 1,376 1,047 2,746 2,081 Incentive fee — — 1,162 1,334 Administration fee 347 357 703 740 General and administrative expenses 581 490 1,119 1,044 Total operating expenses 9,495 6,454 19,402 14,537 OTHER INCOME (EXPENSE): Other income 20 21 2,255 1,345 Interest expense ( 6,141 ) ( 4,990 ) ( 12,334 ) ( 9,953 ) Dividends declared on Series A and Series D cumulative term preferred stock ( 755 ) ( 458 ) ( 1,559 ) ( 916 ) Loss on dispositions of real estate assets, net ( 1,042 ) ( 567 ) ( 1,840 ) ( 666 ) Property and casualty recovery, net — — — 66 (Loss) income from investments in unconsolidated entities ( 11 ) ( 8 ) ( 24 ) 26 Total other expense, net ( 7,929 ) ( 6,002 ) ( 13,502 ) ( 10,098 ) NET (LOSS) INCOME ( 531 ) 182 23 3,283 Net loss (income) attributable to non-controlling interests 1 2 — ( 39 ) NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY ( 530 ) 184 23 3,244 Dividends declared on Series B and Series C cumulative redeemable preferred stock ( 2,939 ) ( 2,262 ) ( 5,702 ) ( 4,388 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 3,469 ) $ ( 2,078 ) $ ( 5,679 ) $ ( 1,144 ) LOSS PER COMMON SHARE: Basic and diluted $ ( 0.12 ) $ ( 0.10 ) $ ( 0.20 ) $ ( 0.05 ) WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic and diluted 29,360,515 21,418,455 28,124,440 21,340,268 COMPREHENSIVE INCOME: Net (loss) income attributable to the Company $ ( 530 ) $ 184 $ 23 $ 3,244 Change in fair value related to interest rate hedging instruments ( 1,211 ) ( 169 ) 156 ( 1,426 ) COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY $ ( 1,741 ) $ 15 $ 179 $ 1,818 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except share data) (Unaudited) Three Months Ended June 30, 2021 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at March 31, 2021 5,956,065 $ 6 1,624,113 $ 2 27,531,951 $ 27 $ 476,996 $ ( 61,066 ) $ ( 133 ) $ 415,832 $ 1,835 $ 417,667 Issuance of Series C Preferred Stock, net — — 405,342 — — — 9,194 — — 9,194 — 9,194 Issuance of common stock, net — — — — 2,946,113 3 63,157 — — 63,160 — 63,160 Net loss — — — — — — — ( 530 ) — ( 530 ) ( 1 ) ( 531 ) Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — ( 2,939 ) — ( 2,939 ) — ( 2,939 ) Distributions—OP Units and common stock — — — — — — — ( 3,998 ) — ( 3,998 ) ( 28 ) ( 4,026 ) Comprehensive loss attributable to the Company — — — — — — — — ( 1,211 ) ( 1,211 ) — ( 1,211 ) Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 224 ) — — ( 224 ) 224 — Balance at June 30, 2021 5,956,065 $ 6 2,029,455 $ 2 30,478,064 $ 30 $ 549,123 $ ( 68,533 ) $ ( 1,344 ) $ 479,284 $ 2,030 $ 481,314 Six Months Ended June 30, 2021 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at December 31, 2020 5,956,065 $ 6 1,088,435 $ 1 26,219,019 $ 26 $ 440,470 $ ( 55,213 ) $ ( 1,500 ) $ 383,790 $ — $ 383,790 Issuance of Series C Preferred Stock, net — — 941,020 1 — — 21,364 — — 21,365 — 21,365 Issuance of OP Units as consideration in real estate acquisitions, net — — — — — — — — — — 3,970 3,970 Issuance of common stock, net — — — — 4,259,045 4 85,386 — — 85,390 — 85,390 Net income — — — — — — — 23 — 23 — 23 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — ( 5,702 ) — ( 5,702 ) — ( 5,702 ) Distributions—OP Units and common stock — — — — — — — ( 7,641 ) — ( 7,641 ) ( 37 ) ( 7,678 ) Comprehensive income attributable to the Company — — — — — — — — 156 156 — 156 Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — 1,903 — — 1,903 ( 1,903 ) — Balance at June 30, 2021 5,956,065 $ 6 2,029,455 $ 2 30,478,064 $ 30 $ 549,123 $ ( 68,533 ) $ ( 1,344 ) $ 479,284 $ 2,030 $ 481,314 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued) (In thousands, except share data) (Unaudited) Three Months Ended June 30, 2020 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at March 31, 2020 5,977,647 $ 6 — $ — 21,346,458 $ 21 $ 348,020 $ ( 40,701 ) $ ( 1,647 ) $ 305,699 $ 2,356 $ 308,055 Issuance of Series B Preferred Stock, net — — — — — — ( 66 ) — — ( 66 ) — ( 66 ) Redemption of Series B Preferred Stock ( 5,165 ) — — — — — ( 124 ) — — ( 124 ) — ( 124 ) Issuance of Series C Preferred Stock, net — — 130,702 — — — 2,963 — — 2,963 — 2,963 Redemption of OP Units — — — — 144,152 — 2,092 — — 2,092 ( 2,092 ) — Issuance of common stock, net — — — — 44,129 1 707 — — 708 — 708 Net income (loss) — — — — — — — 184 — 184 ( 2 ) 182 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — ( 2,262 ) — ( 2,262 ) — ( 2,262 ) Distributions—OP Units and common stock — — — — — — — ( 2,874 ) — ( 2,874 ) ( 30 ) ( 2,904 ) Comprehensive loss attributable to the Company — — — — — — — — ( 169 ) ( 169 ) — ( 169 ) Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 915 ) — — ( 915 ) 915 — Balance at June 30, 2020 5,972,482 $ 6 130,702 $ — 21,534,739 $ 22 $ 352,677 $ ( 45,653 ) $ ( 1,816 ) $ 305,236 $ 1,147 $ 306,383 Six Months Ended June 30, 2020 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at December 31, 2019 4,755,869 $ 5 — $ — 20,936,658 $ 21 $ 315,770 $ ( 38,785 ) $ ( 390 ) $ 276,621 $ 2,349 $ 278,970 Issuance of Series B Preferred Stock, net 1,229,531 1 — — — — 27,049 — — 27,050 — 27,050 Redemption of Series B Preferred Stock ( 12,918 ) — — — — — ( 309 ) — — ( 309 ) — ( 309 ) Issuance of Series C Preferred Stock, net — — 130,702 — — — 2,963 — — 2,963 — 2,963 Redemption of OP Units — — — — 144,152 — 2,092 — — 2,092 ( 2,092 ) — Issuance of common stock, net — — — — 453,929 1 6,031 — — 6,032 — 6,032 Net income — — — — — — — 3,244 — 3,244 39 3,283 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — ( 4,388 ) — ( 4,388 ) — ( 4,388 ) Distributions—OP Units and common stock — — — — — — — ( 5,724 ) — ( 5,724 ) ( 68 ) ( 5,792 ) Comprehensive loss attributable to the Company — — — — — — — — ( 1,426 ) ( 1,426 ) — ( 1,426 ) Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 919 ) — — ( 919 ) 919 — Balance at June 30, 2020 5,972,482 $ 6 130,702 $ — 21,534,739 $ 22 $ 352,677 $ ( 45,653 ) $ ( 1,816 ) $ 305,236 $ 1,147 $ 306,383 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the Six Months Ended June 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 23 $ 3,283 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,336 8,100 Amortization of debt issuance costs 641 365 Amortization of deferred rent assets and liabilities, net ( 294 ) ( 139 ) Amortization of right-of-use assets from operating leases and operating lease liabilities, net ( 11 ) ( 24 ) Loss (income) from investments in unconsolidated entities 24 ( 26 ) Bad debt expense 6 12 Loss on dispositions of real estate assets, net 1,840 666 Changes in operating assets and liabilities: Other assets, net ( 2,413 ) ( 1,426 ) Accounts payable and accrued expenses and Due to related parties, net 2,630 ( 501 ) Other liabilities, net 2,183 ( 373 ) Net cash provided by operating activities 16,965 9,937 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of new real estate assets ( 81,752 ) ( 25,134 ) Capital expenditures on existing real estate assets ( 2,423 ) ( 9,427 ) Proceeds from dispositions of real estate assets — 166 Deposits on prospective real estate acquisitions and investments ( 775 ) ( 705 ) Net cash used in investing activities ( 84,950 ) ( 35,100 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of preferred and common equity 109,720 39,563 Offering costs ( 2,903 ) ( 2,917 ) Redemptions of cumulative redeemable preferred stock (Series B and Series C) — ( 309 ) Proceeds from issuance of mandatorily-redeemable preferred stock (Series D) 60,375 — Redemption of mandatorily-redeemable preferred stock (Series A) ( 28,750 ) — Borrowings from notes and bonds payable 9,903 16,300 Repayments of notes and bonds payable ( 6,607 ) ( 6,588 ) Payments of financing fees ( 2,221 ) ( 378 ) Dividends paid on cumulative redeemable preferred stock (Series B and Series C) ( 6,283 ) ( 3,625 ) Distributions paid on non-controlling common interests in Operating Partnership ( 37 ) ( 68 ) Distributions paid on common stock ( 7,641 ) ( 5,724 ) Net cash provided by financing activities 125,556 36,254 NET INCREASE IN CASH AND CASH EQUIVALENTS 57,571 11,091 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,218 13,688 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 66,789 $ 24,779 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In thousands) (Unaudited) For the Six Months Ended June 30, 2021 2020 NON-CASH INVESTING AND FINANCING INFORMATION: Issuance of non-controlling interests in Operating Partnership in conjunction with acquisitions, net $ 3,970 $ — Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net 997 3,785 Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net 19 — Financing fees included in Accounts payable and accrued expenses and Due to related parties, net 118 95 Unrealized loss related to interest rate hedging instrument ( 1,344 ) ( 1,816 ) Dividends paid on Series C Preferred Stock via additional share issuances 46 — The accompanying notes are an integral part of these condensed consolidated financial statements. 8 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. BUSINESS AND ORGANIZATION Business and Organization Gladstone Land Corporation (“we,” “us,” or the “Company”) is an agricultural real estate investment trust (“REIT”) that was re-incorporated in Maryland on March 24, 2011, having been originally incorporated in California on June 14, 1997. We are primarily in the business of owning and leasing farmland, and we conduct substantially all of our operations through a subsidiary, Gladstone Land Limited Partnership (the “Operating Partnership”), a Delaware limited partnership. As we currently control the sole general partner of the Operating Partnership and own, directly or indirectly, a majority of the common units of limited partnership interest in the Operating Partnership (“OP Units”), the financial position and results of operations of the Operating Partnership are consolidated within our financial statements. As of June 30, 2021 and December 31, 2020, the Company owned approximately 99.3 % and 100.0 %, respectively, of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units). Gladstone Land Advisers, Inc. (“Land Advisers”), a Delaware corporation and a subsidiary of ours, was created to collect any non-qualifying income related to our real estate portfolio and to perform certain small-scale farming business operations. We have elected for Land Advisers to be taxed as a taxable REIT subsidiary (“TRS”) of ours. Since we currently own 100 % of the voting securities of Land Advisers, its financial position and results of operations are consolidated within our financial statements. For the six months ended June 30, 2021, and for the tax year ended December 31, 2020, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income. Subject to certain restrictions and limitations, and pursuant to contractual agreements, our business is managed by Gladstone Management Corporation (the “Adviser”), a Delaware corporation, and administrative services are provided to us by Gladstone Administration, LLC (the “Administrator”), a Delaware limited liability company. Our Adviser and Administrator are both affiliates of ours (see Note 6, “ Related-Party Transactions ,” for additional discussion regarding our Adviser and Administrator). All further references herein to “we,” “us,” “our,” and the “Company” refer, collectively, to Gladstone Land Corporation and its consolidated subsidiaries, except where indicated otherwise. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Information Our interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q in accordance with Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of our management, all adjustments (consisting solely of normal recurring accruals) necessary for the fair statement of financial statements for the interim period have been included. The interim financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 24, 2021 (the “Form 10-K”). The results of operations for the three and six months ended June 30, 2021, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, including the impact of extraordinary events, such as the novel coronavirus (“COVID-19”) pandemic, the results of which form the basis for making certain judgments. Actual results may materially differ from these estimates. 9 Table of Contents Recently-Issued Accounting Pronouncements In April 2020, the FASB issued a staff question-and-answer document, “Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic” (the “COVID-19 Q&A”), to address certain frequently-asked questions pertaining to lease concessions arising from the effects of the COVID-19 pandemic. Existing lease guidance requires entities to determine if a lease concession is a result of a new arrangement reached with the tenant (which would be addressed under the lease modification accounting framework) or if a lease concession is under the enforceable rights and obligations within the existing lease agreement (which would not fall under the lease modification accounting framework). The COVID-19 Q&A clarifies that entities may elect to not evaluate whether lease-related relief granted in light of the effects of COVID-19 is a lease modification, provided that the concession does not result in a substantial increase in rights of the lessor or obligations of the lessee. This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract. We have not needed to make use of this election to date. NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about the 153 farms we owned as of June 30, 2021 (dollars in thousands, except for footnotes): Location No. of Farms Total Acres Farm Acres Net Cost Basis (1) Encumbrances (2) California (3)(4)(5) 58 28,126 26,048 $ 683,313 $ 382,921 Florida 23 20,770 16,256 209,156 129,107 Arizona (6) 6 6,280 5,228 56,280 19,575 Colorado 12 32,773 25,577 47,777 29,998 Washington 3 1,384 1,001 38,519 25,375 Nebraska 9 7,782 7,050 30,528 19,281 Michigan 23 1,892 1,245 24,990 7,012 Texas 1 3,667 2,219 8,287 5,059 Maryland 6 987 863 7,982 4,644 Oregon 3 418 363 6,054 3,839 South Carolina 3 597 447 3,767 2,259 North Carolina 2 310 295 2,225 1,172 New Jersey 3 116 101 2,203 — Delaware 1 180 140 1,280 744 153 105,282 86,833 $ 1,122,361 $ 630,986 (1) Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Specifically, includes Total real estate, net (excluding improvements paid for by the tenant), Lease intangibles, net, and Long-term water assets; plus net above-market lease values, lease incentives, and investments in special-purpose LLCs included in Other assets, net; and less net below-market lease values and other deferred revenue included in Other liabilities, net; each as shown on the accompanying Condensed Consolidated Balance Sheets. (2) Excludes approximately $ 3.5 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheet. (3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of June 30, 2021 , this investment had a net carrying value of approximately $ 1.1 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheet. (4) Includes one farm in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. The ground sublease consists of approximately five acres and had an aggregate net cost basis of approximately $ 782,000 as of June 30, 2021 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet). (5) Includes 20,330 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California. See “— Investments in Water Assets ” below for additional information on this water. (6) Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2022 and February 2025, respectively. In total, these two ground leases consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $ 1.3 million as of June 30, 2021 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet). Real Estate The following table sets forth the components of our investments in tangible real estate assets as of June 30, 2021 , and December 31, 2020 (dollars in thousands): 10 Table of Contents June 30, 2021 December 31, 2020 Real estate: Land and land improvements $ 752,798 $ 713,333 Permanent Plantings 220,633 202,420 Irrigation and drainage systems 143,685 141,408 Farm-related facilities 37,910 28,146 Other site improvements 10,340 10,132 Real estate, at cost 1,165,366 1,095,439 Accumulated depreciation ( 60,402 ) ( 49,236 ) Total real estate, net $ 1,104,964 $ 1,046,203 Real estate depreciation expense on these tangible assets was approximately $ 6.0 million and $ 11.6 million for the three and six months ended June 30, 2021, respectively, and approximately $ 3.5 million and $ 7.0 million for the three and six months ended June 30, 2020, respectively. Included in the figures above are amounts related to improvements made on certain of our properties paid for by our tenants but owned by us, or tenant improvements. As of June 30, 2021 , and December 31, 2020, we recorded tenant improvements, net of accumulated depreciation, of approximately $ 1.9 million and $ 2.0 million, respectively. We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $ 97,000 and $ 194,000 for the three and six months ended June 30, 2021, respectively, and approximately $ 76,000 and $ 152,000 for the three and six months ended June 30, 2020, respectively. Intangible Assets and Liabilities The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of June 30, 2021 , and December 31, 2020 (dollars in thousands): June 30, 2021 December 31, 2020 Lease intangibles: Leasehold interest – land $ 4,292 $ 3,498 In-place leases 2,189 1,968 Leasing costs 1,826 1,640 Tenant relationships 127 127 Lease intangibles, at cost 8,434 7,233 Accumulated amortization ( 3,396 ) ( 3,501 ) Lease intangibles, net $ 5,038 $ 3,732 Total amortization expense related to these lease intangible assets was approximately $ 304,000 and $ 687,000 for the three and six months ended June 30, 2021, respectively, and approximately $ 321,000 and $ 1.1 million for the three and six months ended June 30, 2020, respectively. The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of June 30, 2021 , and December 31, 2020 (dollars in thousands): June 30, 2021 December 31, 2020 Intangible Asset or Liability Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Above-market lease values and lease incentives (1) $ 255 $ ( 154 ) $ 308 $ ( 154 ) Below-market lease values and other deferred revenue (2) ( 2,220 ) 426 ( 908 ) 336 $ ( 1,965 ) $ 272 $ ( 600 ) $ 182 (1) Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. 11 Table of Contents Total amortization related to above-market lease values and lease incentives was approximately $ 44,000 and $ 0 for the three and six months ended June 30, 2021, respectively, and approximately $ 31,000 and $ 62,000 for the three and six months ended June 30, 2020, respectively. Total accretion related to below-market lease values and other deferred revenue was approximately $ 63,000 and $ 99,000 for the three and six months ended June 30, 2021, respectively, and approximately $ 25,000 and $ 50,000 for the three and six months ended June 30, 2020, respectively. Acquisitions 2021 Acquisitions During the six months ended June 30, 2021, we acquired 16 new farms, which are summarized in the table below (dollars in thousands, except for footnotes): Property Name Property Location Acquisition Date Total Acres No. of Farms Primary Crop(s) / Use Lease Term Renewal Options Total Purchase Price Acquisition Costs (1) Annualized Straight-line Rent (2) Palmer Mill Road Dorchester, MD 3/3/2021 228 2 Sod 10.0 years 2 ( 5 years) $ 1,600 $ 56 $ 89 Eight Mile Road – Port Facility San Joaquin, CA 3/11/2021 5 1 Cooling Facility & Storage 9.8 years 3 ( 5 years) 3,977 50 189 South Avenue Tehama, CA 4/5/2021 2,285 1 Olives for Olive Oil 14.7 years 1 ( 5 years) 37,800 149 2,555 Richards Avenue Atlantic, NJ 6/3/2021 116 3 Blueberries 14.9 years 2 ( 5 years) 2,150 57 129 Lerdo Highway (3)(4) Kern, CA 6/4/2021 639 1 Conventional & organic almonds and banked water 10.4 years 3 ( 10 years) 26,492 104 974 Almena Drive Van Buren & Eaton, MI 6/9/2021 930 8 Blueberries 14.7 years 2 ( 5 years) 13,300 49 785 4,203 16 $ 85,319 $ 465 $ 4,721 (1) Includes approximately $ 31,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred. (2) Based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3) Lease provides for an annual participation rent component based on the gross crop revenues earned on the farm. The rent figure above represents only the minimum cash guaranteed under the lease. (4) As part of the acquisition of this property, we acquired a contract to purchase 20,330 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price. We executed this contract on June 25, 2021, at an additional cost of approximately $ 1.2 million, which is included in the total purchase price for this property in the table above. Rent is not currently being earned on the value attributable to the water. See “— Investments in Water Assets ” below for additional information on this water. During the three and six months ended June 30, 2021, in the aggregate, we recognized operating revenues of approximately $ 845,000 and $ 874,000 , respectively, and net income of approximately $ 402,000 and $ 398,000 , respectively, related to the above acquisitions. 2020 Acquisitions During the six months ended June 30, 2020, we acquired four new farms, which are summarized in the table below (dollars in thousands, except for footnotes): Property Name Property Location Acquisition Date Total Acres No. of Farms Primary Crop(s) Lease Term Renewal Options Total Purchase Price Acquisition Costs (1) Annualized Straight-line Rent (2) County Road 18 Phillips, CO 1/15/2020 1,325 2 Sugar beets, edible beans, potatoes, & corn 6.0 years None $ 7,500 $ 39 $ 417 Lamar Valley Chase, NE 5/7/2020 678 1 Potatoes, edible beans, & corn 6.7 years 2 ( 5 years) 3,500 43 204 Driver Road (3) Kern, CA 6/5/2020 590 1 Pecans 4.7 years 2 ( 10 years) 14,169 52 784 2,593 4 $ 25,169 $ 134 $ 1,405 (1) Includes approximately $ 18,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred. (2) Based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3) The lease provides for an initial term of 14.7 years and includes six tenant termination options throughout the initial term. The lease term stated above represents the term through the first available termination option, and the annualized straight-line rent amount represents the rent guaranteed through the noncancellable term of the lease. 12 Table of Contents During the three and six months ended June 30, 2020, we recognized operating revenues of approximately $ 191,000 and $ 280,000 , respectively, and net income of approximately $ 125,000 and $ 196,000 , respectively, related to the above acquisitions. Purchase Price Allocations The allocation of the aggregate purchase price for the farms acquired during each of the six months ended June 30, 2021 and 2020 is as follows (dollars in thousands): Assets (Liabilities) Acquired 2021 Acquisitions 2020 Acquisitions Land and Land Improvements $ 39,092 $ 22,630 Permanent Plantings 18,075 369 Irrigation & Drainage Systems 3,411 2,119 Farm-related Facilities 9,134 51 Other Site Improvements 136 — Leasehold Interest—Land 787 — In-place Lease Values 687 — Leasing Costs 509 — Below-market Lease Values (1) ( 1,321 ) — Water Purchase Contract (2) 13,563 — Total Purchase Price $ 84,073 $ 25,169 (1) Included within Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets. (2) Included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. Represents only the value attributable to the water purchase contract acquired as part of the acquisition of Lerdo Highway and excludes approximately $ 1.2 million paid to execute the contract subsequent to acquisition. Investments in Unconsolidated Entities In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related limited liability company (the “Fresno LLC”), the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties. As of June 30, 2021 , our aggregate ownership interest in the LLC was 50.0 %. As our investment in the Fresno LLC is deemed to constitute “significant influence,” we have accounted for this investment under the equity method. We recorded (loss) income of approximately $( 11,000 ) and $( 24,000 ) during the three and six months ended June 30, 2021, respectively, and approximately $( 8,000 ) and $ 26,000 during the three and six months ended June 30, 2020, respectively (included on our Condensed Consolidated Statements of Operations and Comprehensive Income as (Loss) income from investments in unconsolidated entities), which represents our pro-rata share of the (loss) income recognized by the Fresno LLC. Our combined ownership interest in the Fresno LLC, which had an aggregate carrying value of approximately $ 1.1 million and $ 1.2 million, as of June 30, 2021 , and December 31, 2020, respectively, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. Investments in Water Assets In connection with the acquisition of certain farmland located in Kern County, California, on June 4, 2021, we also acquired a contract to purchase 20,330 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water storage district located in Kern County, California, at a fixed price. The contract to purchase the banked water could not readily be net settled by means outside of the contract, and all rights and obligations associated with the purchase contract were transferred to us at acquisition of the related farmland. We were not required to purchase a specific amount, or any, of the 20,330 acre-feet of water. Upon acquisition, we recognized the contract at its relative fair value in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” On June 25, 2021, we executed the contract to purchase all 20,330 acre-feet of banked water for an additional cost of approximately $ 1.2 million. The purchased banked water was recognized at cost, including any administrative fees necessary to transfer the water to our banked water account. While we may, in the future, sell the banked water to an unrelated third party for a profit, our current intent is to hold the water for the long-term for future use on our own farms. There is no amount of time by which we must use the water held by SWSD. As of June 30, 2021, the investment in banked water had a carrying value of approximately $ 14.8 million, which includes the subsequent cost to execute the contract, and is included within Other assets, net on our Condensed Consolidated Balance Sheet. 13 Table of Contents Each quarter, we will review the investment in banked water for any indicators of impairment in accordance with ASC 360, “Property, Plant, and Equipment,” and perform an impairment analysis if there are any such indicators. As of June 30, 2021 , we concluded that there were no such indicators and that the water was not impaired. Portfolio Concentrations Credit Risk As of June 30, 2021 , our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. No individual tenant represented greater than 10.0% of the total lease revenue recorded during the six months ended June 30, 2021. Geographic Risk Farms located in California and Florida accounted for approximately $ 20.6 million ( 62.6 %) and $ 6.7 million ( 20.5 %), respectively, of the total lease revenue recorded during the six months ended June 30, 2021. Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster (such as an earthquake, wildfire, or flood) occur or climate change impact the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations. None of our farms in California or Florida have been materially impacted by the recent wildfires or hurricanes that occurred in those respective regions. In addition, in light of the ongoing drought taking place in the western U.S., all of our farms in the region have independent (and, in most cases, multiple) sources of water, in addition to rainfall, and have not been materially impacted by the current drought conditions. No other single state accounted for more than 10.0% of our total lease revenue recorded during the six months ended June 30, 2021. Impairment We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment. As of June 30, 2021 , and December 31, 2020, we concluded that none of our properties were impaired. There have been no impairments recognized on our real estate assets since our inception. NOTE 4. BORROWINGS Our borrowings as of June 30, 2021 , and December 31, 2020, are summarized below (dollars in thousands): Carrying Value as of As of June 30, 2021 June 30, 2021 December 31, 2020 Stated Interest Rates (1) (Range; Wtd. Avg) Maturity Dates (Range; Wtd. Avg) Notes and bonds payable: Fixed-rate notes payable $ 538,792 $ 492,182 2.44 %– 5.70 %; 3.72 % 2/14/2022–11/1/2045; November 2031 Variable-rate notes payable — 45,525 N/A N/A Fixed-rate bonds payable 92,094 89,883 2.13 %– 4.57 %; 3.49 % 8/17/2021–10/31/2028; July 2024 Total notes and bonds payable 630,886 627,590 Debt issuance costs – notes and bonds payable ( 3,478 ) ( 3,629 ) N/A N/A Notes and bonds payable, net $ 627,408 $ 623,961 Variable-rate revolving lines of credit $ 100 $ 100 2.50 % 4/5/2024 Total borrowings, net $ 627,508 $ 624,061 (1) Where applicable, stated interest rates are before interest patronage (as described below). As of June 30, 2021 , the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.0 billion. The weighted-average interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 3.73 % and 3.71 % for the three and six months ended June 30, 2021, respectively, as compared to 3.98 % for each of the three and six months ended June 30, 2020. In addition, 2020 interest patronage from our Farm Credit Notes Payable (as defined below) resulted in a 28.7 % reduction (approximately 135 14 Table of Contents basis points) to the stated interest rates on such borrowings. See below under “ —Farm Credit Notes Payable—Interest Patronage” for further discussion on interest patronage. As of June 30, 2021 , we were in compliance with all covenants applicable to the above borrowings. New MetLife Facility As of December 31, 2019, our facility with Metropolitan Life Insurance Company (“MetLife”) consisted of a total of $ 200.0 million of term notes (the “Prior MetLife Term Notes”) and $ 75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the Prior MetLife Term Notes, the “Prior MetLife Facility”). The draw period for the Prior MetLife Term Notes expired on December 31, 2019, with approximately $ 21.5 million being left undrawn, and MetLife had no obligation to disburse the remaining funds under those notes. On February 20, 2020, we entered into an agreement with MetLife to remove the MetLife Lines of Credit from the Prior MetLife Facility and create a new credit facility consisting of a new $ 75.0 million long-term note payable (the “New MetLife Term Note”) and the MetLife Lines of Credit (collectively, the “New MetLife Facility”). The following table summarizes the pertinent terms of the New MetLife Facility as of June 30, 2021 (dollars in thousands, except for footnotes): Issuance Aggregate Commitment Maturity Dates Principal Outstanding Interest Rate Terms Undrawn Commitment New MetLife Term Note $ 75,000 (1) 1/5/2030 $ 36,900 2.75 %, fixed through 1/4/2030 (2) 38,100 (3) MetLife Lines of Credit 75,000 4/5/2024 100 3-month LIBOR + 2.00 % (4) 74,900 (3) Total principal outstanding $ 37,000 (1) If the aggregate commitment under the New MetLife Term Note is not fully utilized by December 31, 2022, MetLife has the option to be relieved of its obligation to disburse the additional funds thereunder. (2) Interest rates on any future disbursements under the New MetLife Term Note will be based on prevailing market rates at the time of such disbursements. In addition, through December 31, 2022, the New MetLife Term Note is also subject to an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under the New MetLife Term Note). (3) Based on the properties that were pledged as collateral under the New MetLife Facility, as of June 30, 2021 , the maximum additional amount we could draw under the facility was approximately $ 24.2 million. (4) The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50 %, plus an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under each line of credit). Farmer Mac Facility On December 5, 2014, we, through certain subsidiaries of our Operating Partnership, entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation (the “Bond Purchaser”), for a secured note purchase facility. As subsequently amended, the Bond Purchase Agreement provided for bond issuances up to an aggregate amount of $ 125.0 million (the “Prior Farmer Mac Facility”) through December 11, 2018, after which date the Bond Purchaser had the option to continue buying new bonds issued under the Farmer Mac Facility. On December 10, 2020, we entered into an amended and restated bond purchase agreement (the “Amended and Restated Bond Purchase Agreement”) with Farmer Mac and the Bond Purchaser, increasing the secured note purchase facility to provide for bond issuances up to an aggregate principal amount of $ 225.0 million (the “New Farmer Mac Facility”). In addition, the Amended and Restated Bond Purchase Agreement extended the date through which we may issue new bonds to May 31, 2023, and the final maturity date for bonds issued under the Farmer Mac Facility to December 31, 2030. During the six months ended June 30, 2021, we issued one new bond under the Farmer Mac Facility, the pertinent terms of which are summarized in the following table (dollars in thousands): Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate Interest Rate Terms 2/4/2021 $ 2,460 10/31/2028 25.0 years 3.13 % Fixed throughout term As of June 30, 2021 , we have approximately $ 92.1 million of bonds issued and outstanding under the Farmer Mac Facility. Farm Credit Notes Payable From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with 13 different Farm Credit associations (collectively, “Farm Credit”). During the six months ended June 30, 2021, we entered into the following loan agreements with Farm Credit (dollars in thousands): 15 Table of Contents Issuer Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate (1) Interest Rate Terms Farm Credit West, FLCA (2) 1/28/2021 $ 2,073 11/1/2045 24.8 years 3.23 % Fixed through 12/31/2027 (variable thereafter) Mid Atlantic Farm Credit, ACA 3/3/2021 960 6/1/2045 24.4 years 3.80 % Fixed through 1/31/2031 (variable thereafter) (1) Stated rate is before interest patronage, as described below. (2) Loan proceeds used to repay a previously-issued loan with an outstanding balance of approximately $ 1.4 million and a stated interest rate of 4.99 %. In addition, on June 30, 2021, we entered into two loan agreements with Golden State Farm Credit to provide for total future loan proceeds of $ 22.8 million on a delayed funding basis. Disbursement of these loans must occur by October 1, 2021, and once disbursed, the loans will bear interest at a fixed rate (before patronage) of 3.75 %, which will be fixed for ten years . Interest Patronage Interest patronage, or refunded interest, on our borrowings from Farm Credit is generally recorded upon receipt and is included within Other income on our Condensed Consolidated Statements of Operations and Comprehensive Income. Receipt of interest patronage typically occurs in the first half of the calendar year following the calendar year in which the respective interest expense is accrued. During the three months ended March 31, 2021, we recorded interest patronage of approximately $ 2.2 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2020. In addition, during the three months ended September 30, 2020, we recorded approximately $ 306,000 of 2020 interest patronage, as certain Farm Credit associations prepaid a portion of the 2020 interest patronage (which related to interest accrued during 2020 but is typically received in 2021). In total, we recorded approximately $ 2.5 million of 2020 interest patronage related to our Farm Credit Notes Payable, which resulted in a 28.7 % reduction (approximately 135 basis points) to the interest rates on such borrowings. Other Borrowings During the six months ended June 30, 2021, we entered into loan agreements with certain other lenders, the terms of which are summarized in the following table (dollars in thousands): Lender Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate Interest Rate Terms Rabo AgriFinance, LLC (1) 3/11/2021 $ 3,780 12/1/2030 25.0 years 3.27 % Fixed throughout term Rabo AgriFinance, LLC (1) 3/11/2021 630 12/1/2022 None (interest only) 2.44 % Fixed throughout term (1) Loans were issued as variable-rate loans but were subsequently fixed through our entry into interest rate swap agreements with the lender (as counterparty). Debt Service – Aggregate Maturities Scheduled principal payments of our aggregate notes and bonds payable as of June 30, 2021 , for the succeeding years are as follows (dollars in thousands): Period Scheduled Principal Payments For the remaining six months ending December 31: 2021 $ 14,703 For the fiscal years ending December 31: 2022 51,932 2023 44,006 2024 40,127 2025 37,137 2026 16,260 Thereafter 426,721 $ 630,886 Fair Value ASC 820, “Fair Value Measurement (Subtopic 820)” (“ASC 820”), provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous, market and prioritizes the use of market-based inputs to the valuation. ASC 820-10 establishes a three-level hierarchy for fair value measurements based upon the 16 Table of Contents transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 — inputs that are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 — inputs are based upon quoted prices for similar assets or liabilities in active or inactive markets or model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — inputs are generally unobservable and significant to the fair value measurement. These unobservable inputs are generally supported by little or no market activity and are based upon management’s estimates of assumptions that market participants would use in pricing the asset or liability. As of June 30, 2021 , the aggregate fair value of our long-term notes and bonds payable was approximately $ 628.6 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 630.9 million. The fair value of our long-term notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on long-term debt with comparable terms. Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of June 30, 2021 , is deemed to approximate their aggregate carrying value of $ 0.1 million. Interest Rate Swap Agreements In order to hedge our exposure to variable interest rates, we have entered into various interest rate swap agreements in connection with certain of our mortgage financings. In accordance with these swap agreements, we will pay our counterparty a fixed interest rate on a quarterly basis and receive payments from our counterparty equal to the respective stipulated floating rates. We have adopted the fair value measurement provision for these financial instruments, and the aggregate fair value of our interest rate swap agreements is recorded in Other assets, net or Other liabilities, net, as appropriate, on our accompanying Condensed Consolidated Balance Sheets. Generally, in the absence of observable market data, we will estimate the fair value of our interest rate swaps using estimates of certain data points, including estimated remaining life, counterparty credit risk, current market yield, and interest rate spreads of similar securities as of the measurement date. As of June 30, 2021 , our interest rate swaps were valued using Level 2 inputs. In addition, we have designated our interest rate swaps as cash flow hedges, and we record changes in the fair values of the interest rate swap agreements to accumulated other comprehensive income on the Condensed Consolidated Balance Sheets. We record changes in fair value on a quarterly basis, using current market valuations at quarter end. The following table summarizes our interest rate swap agreements as of June 30, 2021 , and December 31, 2020 (dollars in thousands): Period Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability As of June 30, 2021 $ 61,632 $ — $ ( 1,344 ) As of December 31, 2020 14,077 — ( 1,500 ) The following table summarizes certain balance sheet information regarding our derivative instruments as of June 30, 2021 , and December 31, 2020 (dollars in thousands): Derivative Asset (Liability) Fair Value Derivative Type Balance Sheet Location June 30, 2021 December 31, 2020 Derivatives Designated as Hedging Instruments: Interest rate swaps Other assets, net $ — $ — Interest rate swaps Other liabilities, net ( 1,344 ) ( 1,500 ) Total, net $ ( 1,344 ) $ ( 1,500 ) The following table presents the amount of income (loss) recognized in comprehensive income within our condensed consolidated financial statements for the three and six months ended June 30, 2021 and 2020 (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Derivative in cash flow hedging relationship: Interest rate swaps $ ( 1,211 ) $ ( 169 ) $ 156 $ ( 1,426 ) Total $ ( 1,211 ) $ ( 169 ) $ 156 $ ( 1,426 ) 17 Table of Contents NOTE 5. MANDATORILY-REDEEMABLE PREFERRED STOCK Series A Term Preferred Stock In August 2016, we completed a public offering of 6.375 % Series A Cumulative Term Preferred Stock, par value $ 0.001 per share (the “Series A Term Preferred Stock”), at a public offering price of $ 25.00 per share. As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 1,150,000 shares of the Series A Term Preferred Stock for gross proceeds of approximately $ 28.8 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $ 27.6 million. On February 12, 2021, we redeemed all of our outstanding shares of Series A Term Preferred Stock at a cash redemption price of $ 25.00 per share plus all accrued and unpaid dividends up to, but excluding, the redemption date. In total, we paid approximately $ 28.8 million for the redemption of the Series A Term Preferred Stock using proceeds from the offering of our Series D Term Preferred Stock (as defined below). Our Series A Term Preferred Stock was delisted from Nasdaq on the date we redeemed all outstanding shares. In connection with this early redemption, during the three months ended March 31, 2021, we wrote off approximately $ 127,000 of unamortized issuance costs related to the issuance of the Series A Term Preferred Stock. On May 7, 2021, we filed Articles Supplementary reclassifying 850,000 shares of authorized but unissued Series A Term Preferred Stock as additional shares of common stock. Series D Term Preferred Stock In January 2021, we completed a public offering of 5.00 % Series D Cumulative Term Preferred Stock, par value $ 0.001 per share (the “Series D Term Preferred Stock”), at a public offering price of $ 25.00 per share. As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 2,415,000 shares of the Series D Term Preferred Stock for gross proceeds of approximately $ 60.4 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $ 58.3 million. The Series D Term Preferred Stock is traded under the ticker symbol “LANDM” on Nasdaq. The shares of the Series D Term Preferred Stock have a mandatory redemption date of January 31, 2026, and are not convertible into our common stock or any other securities. Generally, we are not permitted to redeem shares of the Series D Term Preferred Stock prior to January 31, 2023, except in limited circumstances to preserve our qualification as a REIT. On or after January 31, 2023, we may redeem the shares at a redemption price of $ 25.00 per share, plus any accumulated and unpaid dividends up to, but excluding, the date of redemption. We incurred approximately $ 2.1 million in total offering costs related to this issuance, which have been recorded net of the Series D Term Preferred Stock as presented on the accompanying Condensed Consolidated Balance Sheets and are being amortized over the mandatory redemption period as a component of interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The Series D Term Preferred Stock is recorded as a liability on our accompanying Condensed Consolidated Balance Sheets in accordance with ASC 480, “Distinguishing Liabilities from Equity,” which states that mandatorily-redeemable financial instruments should be classified as liabilities. In addition, the related dividend payments are treated similarly to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. As of June 30, 2021 , the fair value of our Series D Term Preferred Stock was approximately $ 62.9 million, as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 60.4 million. The fair value of our Series D Term Preferred Stock uses Level 1 inputs under the hierarchy established by ASC 820-10 and is calculated based on the closing per-share price on June 30, 2021 , of $ 26.03 . For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the three and six months ended June 30, 2021, see Note 8, “ Equity—Distributions .” NOTE 6. RELATED-PARTY TRANSACTIONS Our Adviser and Administrator We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator, which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly. Both our Adviser and Administrator are affiliates of ours, as their parent company is owned and controlled by David Gladstone, our chairman, chief executive officer, and president. In addition, two of our executive officers, Mr. Gladstone and Terry Brubaker (our vice chairman and chief operating officer), serve as directors and executive officers of each of our Adviser and Administrator, and Michael 18 Table of Contents LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary) is also executive vice president of administration of our Adviser. We have entered into an investment advisory agreement with our Adviser (as amended from time to time, the “Advisory Agreement”) and an administration agreement with our Administrator (the “Administration Agreement”). The Advisory Agreement and the Administration Agreement were both approved unanimously by our board of directors, including our independent directors. A summary of the compensation terms for the Advisory Agreement and a summary of the Administration Agreement is below. Advisory Agreement Pursuant to the Advisory Agreement, our Adviser is compensated in the form of a base management fee, an incentive fee, a capital gains fee, and a termination fee. Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs. Each of the base management, incentive, capital gains, and termination fees is described below. Base Management Fee Pursuant to the Advisory Agreement, a base management fee is paid quarterly and, from January 1, 2020, through June 30, 2021, was calculated at an annual rate of 0.50 % ( 0.125 % per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter. See Note 11, “ Subsequent Events—Amended Advisory Agreement ,” for a discussion of an amendment to the Advisory Agreement, which revised the base management fee to 0.60 % ( 0.15 % per quarter) of the prior calendar quarter’s Gross Tangible Real Estate, beginning with the three months ending September 30, 2021. Incentive Fee Pursuant to the Advisory Agreement, an incentive fee is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeded a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Common Equity. For purposes of this calculation, Pre-Incentive Fee FFO is defined in the Advisory Agreement as FFO (also as defined in the Advisory Agreement) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends declared on preferred stock securities that were not treated as a liability for GAAP purposes. In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items. Our Adviser would receive: (i) no Incentive Fee in any calendar quarter in which the Pre-Incentive Fee FFO did not exceed the hurdle rate; (ii) 100 % of the Pre-Incentive Fee FFO with respect to that portion of such Pre-Incentive Fee FFO, if any, that exceeded the hurdle rate but was less than 2.1875 % in any calendar quarter ( 8.75 % annualized); and (iii) 20 % of the amount of the Pre-Incentive Fee FFO, if any, that exceeded 2.1875 % in any calendar quarter ( 8.75 % annualized). Capital Gains Fee Pursuant to the Advisory Agreement, a capital gains-based incentive fee will be calculated and payable in arrears at the end of each fiscal year (or upon termination of the Advisory Agreement). The capital gains fee shall equal: (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid. Termination Fee Pursuant to the Advisory Agreement, in the event of our termination of the agreement with our Adviser for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to three times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24 -month period prior to such termination. Administration Agreement 19 Table of Contents Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs. As approved by our Board of Directors, effective July 1, 2014, our allocable portion of the Administrator’s expenses is generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under similar contractual agreements. Gladstone Securities On April 11, 2017, we entered into an agreement with Gladstone Securities, LLC (“Gladstone Securities”), for it to act as our non-exclusive agent to assist us with arranging financing for our properties (the “Financing Arrangement Agreement”). Gladstone Securities is a privately-held broker-dealer and a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is owned and controlled by Mr. Gladstone, who also serves on the board of managers of Gladstone Securities. In addition, Michael LiCalsi, our General Counsel and Secretary, serves in several capacities for Gladstone Securities, including as Chief Legal Officer, Secretary, and a member of its board of managers since 2010 and a managing principal since 2011. Financing Arrangement Agreement We pay Gladstone Securities a financing fee in connection with the services it provides to us for securing financing on our properties. Depending on the size of the financing obtained, the maximum amount of the financing fee, which will be payable upon closing of the respective financing, will range from 0.5 % to 1.0 % of the amount of financing obtained. The amount of the financing fee may be reduced or eliminated as determined by us and Gladstone Securities after taking into consideration various factors, including, but not limited to, the involvement of any unrelated third-party brokers and general market conditions. We paid total financing fees to Gladstone Securities of approximately $ 35,000 and $ 52,000 , during the three and six months ended June 30, 2021, respectively, and approximately $ 28,000 during each of the three and six months ended June 30, 2020. Through June 30, 2021 , the total amount of financing fees paid to Gladstone Securities represented approximately 0.14 % of the total financings secured since the Financing Arrangement Agreement has been in place. Dealer-Manager Agreement On February 20, 2020, we entered into a dealer-manager agreement (the “Dealer-Manager Agreement”), with Gladstone Securities, whereby Gladstone Securities serves as our exclusive dealer-manager in connection with the offering of our Series C Preferred Stock (as defined in Note 8, “ Equity—Equity Issuances—Series C Preferred Stock ”). Pursuant to the Dealer-Manager Agreement, Gladstone Securities provides certain sales, promotional, and marketing services to us in connection with the offering of the Series C Preferred Stock, and we generally pay Gladstone Securities the following: i selling commissions of up to 6.0 % of the gross proceeds from sales in the offering (the “Selling Commissions”), and ii a dealer-manager fee of 3.0 % of the gross proceeds from sales in the offering (the “Dealer-Manager Fees”). No Selling Commissions or Dealer-Manager Fee shall be paid with respect to shares of the Series C Preferred Stock sold pursuant to our dividend reinvestment plan (the “DRIP”) for the Series C Preferred Stock. Gladstone Securities may, in its sole discretion, remit all or a portion of the Selling Commissions and also reallow all or a portion of the Dealer-Manager Fees to participating broker-dealers and wholesalers in support of the offerings. The terms of the Dealer-Manager Agreement were approved by our board of directors, including its independent directors. In connection with sales of the Series C Preferred Stock, we paid total Selling Commissions and Dealer-Manager Fees to Gladstone Securities of approximately $ 808,000 and $ 2.0 million during the three and six months ended June 30, 2021, respectively, and approximately $ 286,000 during each of the three and six months ended June 30, 2020. The majority of these amounts were then remitted by Gladstone Securities to unrelated third parties involved in the respective offerings, including participating broker-dealers and wholesalers. Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities are netted against the gross proceeds received from sales of the respective securities and are included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets. Related-Party Fees The following table summarizes related-party fees paid or accrued for and reflected in our accompanying condensed consolidated financial statements (dollars in thousands): 20 Table of Contents For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Base management fee (1)(2) $ 1,376 $ 1,047 $ 2,746 $ 2,081 Incentive fee (1)(2) — — 1,162 1,334 Total fees to our Adviser, net $ 1,376 $ 1,047 $ 3,908 $ 3,415 Administration fee (1)(2) $ 347 $ 357 $ 703 $ 740 Selling Commissions and Dealer-Manager Fees (1)(3)(4) $ 808 $ 286 $ 1,952 $ 2,770 Financing fees (1)(5) 35 28 52 28 Total fees to Gladstone Securities $ 843 $ 314 $ 2,004 $ 2,798 (1) Pursuant to the agreements with the respective related-party entities, as discussed above. (2) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (3) Included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets. (4) During the three months ended March 31, 2020, in connection with sales of our 6.00 % Series B Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series B Preferred Stock”), we paid total selling commissions and dealer-manager fees to Gladstone Securities of approximately $ 2.5 million. The offering of the Series B Preferred Stock was completed on March 9, 2020, and the security was listed on Nasdaq under the ticker “LANDO” during the year ended December 31, 2020. (5) Included within Notes and bonds payable, net on the Condensed Consolidated Balance Sheets and amortized into Interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. Related-Party Fees Due Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of June 30, 2021 , and December 31, 2020, were as follows (dollars in thousands): June 30, 2021 December 31, 2020 Base management fee $ 1,376 $ 1,130 Incentive fee — 883 Other (1) 39 18 Total due to Adviser 1,415 2,031 Administration fee 347 363 Cumulative accrued but unpaid portion of prior Administration Fees (2) 232 75 Total due to Administrator 579 438 Due to Gladstone Securities (3) — 15 Total due to related parties (4) $ 1,994 $ 2,484 (1) Other amounts due to or from our Adviser primarily relate to miscellaneous general and administrative expenses either paid by our Adviser on our behalf or by us on our Adviser’s behalf. (2) Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end. (3) Represents certain Selling Commissions and Dealer-Manager Fees owed in connection with recent sales of our Series C Preferred Stock. (4) Reflected as a line item on our accompanying Condensed Consolidated Balance Sheets. NOTE 7. COMMITMENTS AND CONTINGENCIES Operating Obligations In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms, which are summarized in the table below (dollars in thousands): 21 Table of Contents Farm Location Farm Acreage Total Commitment Obligated Completion Date (1) Amount Expended or Accrued as of June 30, 2021 Hillsborough, FL 55 $ 2,250 (2) Q3 2021 $ 1,201 Tulare, CA 160 700 (2) Q3 2021 — Wicomico & Caroline, MD, and Sussex, DE 833 115 Q3 2021 36 Napa, CA 270 1,548 (2) Q3 2023 — Santa Barbara, CA 271 4,000 (2) Q3 2024 2,427 Columbia, OR 157 1,800 (2) Q3 2024 1,146 Collier & Hendry, FL 3,612 2,000 (2) Q2 2025 — (1) Our obligation to provide capital to fund these improvements does not extend beyond these respective dates. (2) Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us. Ground Lease Obligations We are obligated as lessee under three ground leases. Future minimum lease payments due under the remaining non-cancelable terms of these leases as of June 30, 2021 , is as follows (dollars in thousands): Period Future Lease Payments (1) For the remaining six months ending December 31: 2021 $ 33 For the fiscal years ending December 31: 2022 70 2023 70 2024 70 2025 40 2026 40 Thereafter 600 Total undiscounted lease payments 923 Less: imputed interest ( 273 ) Present value of lease payments $ 650 (1) Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the State of Arizona, as lessor). The amounts shown above represent estimated amounts based on the lease rates currently in place. As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Consolidated Statement of Operations and Comprehensive Income) of approximately $ 22,000 and $ 36,000 during the three and six months ended June 30, 2021, respectively, and approximately $ 12,000 and $ 24,000 during the three and six months ended June 30, 2020, respectively. Litigation In the ordinary course of business, we may be involved in legal proceedings from time to time. We are not currently subject to any material known or threatened litigation. NOTE 8. EQUITY Registration Statement On March 6, 2020, we filed a universal registration statement on Form S-3 (File No. 333-236943) with the SEC (the “Registration Statement”) to replace our prior universal registration statement. The Registration Statement, which was declared effective by the SEC on April 1, 2020, permits us to issue up to an aggregate of $ 1.0 billion in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. Through June 30, 2021 , we have issued a total of 2,029,593 shares of Series C Preferred Stock for gross proceeds of approximately $ 50.4 million, 2,415,000 shares of Series D Term Preferred Stock for gross proceeds of approximately $ 60.4 million, and 8,843,303 shares of common stock (excluding 288,303 shares of 22 Table of Contents common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $ 154.2 million under the Registration Statement. Equity Issuances Series C Preferred Stock On April 3, 2020, we filed a new prospectus supplement (which superseded and replaced a previously-filed prospectus supplement) with the SEC for a continuous public offering (the “Series C Offering”) of up to 26,000,000 shares of our newly-designated 6.00 % Series C Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”). The Series C Offering permits us to sell up to 20,000,000 shares (the “Primary Series C Offering”) of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $ 25.00 per share and up to 6,000,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $ 22.75 per share. The following table provides information on equity sales that have occurred during the six months ended June 30, 2021 (dollars in thousands, except per-share amounts): Number of Shares Sold (1) Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (2) 939,020 $ 24.83 $ 23,315 $ 21,363 (1) Excludes shares issued pursuant to the DRIP. During the six months ended June 30, 2021, we issued approximately 2,001 shares of the Series C Preferred Stock pursuant to the DRIP. (2) Net of Selling Commissions and Dealer-Manager Fees. As of June 30, 2021 , excluding Selling Commissions and Dealer-Manager Fees, we have incurred approximately $ 408,000 of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold. See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreement ,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series C Offering. The Series C Offering will terminate on the date (the “Series C Termination Date”) that is the earlier of either June 1, 2025 (unless terminated earlier or extended by our Board of Directors), or the date on which all 20,000,000 shares in the Primary Series C Offering are sold. There is currently no public market for shares of the Series C Preferred Stock; however, we intend to apply to list the Series C Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Series C Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all. See Note 11, “ Subsequent Events—Equity Activity—Equity Issuances ,” for sales of Series C Preferred Stock completed subsequent to June 30, 2021 . Common Stock At-the-Market Program On May 12, 2020, we entered into equity distribution agreements with Virtu Americas, LLC, and Ladenburg & Co., Inc., under which we may issue and sell, from time to time and through the current Sales Agents, shares of our common stock having an aggregate offering price of up to $ 100.0 million (the “ATM Program”). On May 18, 2021, we entered into separate amendments to the existing equity distribution agreements to allow us to sell up to $ 160.0 million of additional shares of our common stock, expanding the aggregate offering price to up to $ 260.0 million. The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the six months ended June 30, 2021 (dollars in thousands, except per-share amounts): Number of Shares Sold Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (1) 4,259,045 $ 20.29 $ 86,405 $ 85,541 (1) Net of underwriting commissions and discounts. See Note 11, “ Subsequent Events—Equity Activity—Equity Issuances ,” for sales of sales of common stock completed under the ATM Program subsequent to June 30, 2021 . Non-Controlling Interests in Operating Partnership 23 Table of Contents We consolidate our Operating Partnership, which is a majority-owned partnership. As of June 30, 2021 , and December 31, 2020, we owned approximately 99.3 % and 100.0 %, respectively, of the outstanding OP Units. As of June 30, 2021 , and December 31, 2020, there were 204,778 and 0 OP Units held by non-controlling OP Unitholders, respectively. On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one-for-one basis. The cash redemption per OP Unit would be based on the market price of our common stock at the time of redemption. A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof. Information regarding OP Units issued to noncontrolling OP Unitholders during the six months ended June 30, 2021, is provided in the following table (dollars in thousands, except per-unit amounts): Number of OP Units Issued Weighted Average Issuance Price per OP Unit Aggregate Value (1) 204,778 $ 19.42 $ 3,977 (1) Based on the closing stock price of the Company’s common stock on the date of issuance. No OP Units were tendered for redemption during the six months ended June 30, 2021. Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock. When a non-controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased. The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders. Distributions The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three and six months ended June 30, 2021 and 2020 are reflected in the table below. Three months ended June 30, Six months ended June 30, Issuance 2021 2020 2021 2020 Series A Term Preferred Stock (1)(2) $ — $ 0.39844 $ 0.1815104 $ 0.7968750 Series B Preferred Stock 0.375 0.375 0.750 0.750 Series C Preferred Stock 0.375 0.375 0.750 0.375 Series D Term Preferred Stock (1)(3) 0.312501 — 0.559029 — Common Stock (4) 0.135 0.1341 0.26985 0.26805 (1) Dividends are treated similar to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (2) The Series A Term Preferred Stock was redeemed in full on February 12, 2021. (3) The Series D Term Preferred Stock was issued on January 19, 2021. (4) The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders. NOTE 9. LEASE REVENUES The following table sets forth the components of our lease revenues for the three and six months ended June 30, 2021 and 2020 (dollars in thousands, except for footnotes): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Fixed lease payments (1) $ 16,836 $ 12,350 $ 32,816 $ 24,612 Variable lease payments (2) 57 288 111 3,306 Lease revenues, net (3) $ 16,893 $ 12,638 $ 32,927 $ 27,918 24 Table of Contents (1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue. (2) Variable lease payments include participation rents, which are generally based on a percentage of the gross crop revenues earned on the farm, and reimbursements of certain property operating expenses by tenants. Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. During the three and six months ended June 30, 2021, we recorded participation rents of approximately $ 19,000 and $ 45,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 38,000 and $ 66,000 , respectively. During the three and six months ended June 30, 2020, we recorded participation rents of approximately $ 44,000 and $ 74,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 244,000 and $ 422,000 , respectively. In addition, during the six months ended June 30, 2020, we received a lease termination payment of approximately $ 3.0 million. (3) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. NOTE 10. EARNINGS PER SHARE OF COMMON STOCK The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2021 and 2020, computed using the weighted average number of shares outstanding during the respective periods. Earnings figures are presented net of non-controlling interests in the earnings per share calculations. The non-controlling limited partners’ outstanding OP Units (which may be redeemed for shares of common stock) have been excluded from the diluted per-share calculation, as there would be no effect on the amounts since the non-controlling OP Unitholders’ share of earnings would also be added back to net income or loss. Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands, except per-share amounts): 2021 2020 2021 2020 Net loss attributable to common stockholders $ ( 3,469 ) $ ( 2,078 ) $ ( 5,679 ) $ ( 1,144 ) Weighted average shares of common stock outstanding – basic and diluted 29,360,515 21,418,455 28,124,440 21,340,268 Loss per common share – basic and diluted $ ( 0.12 ) $ ( 0.10 ) $ ( 0.20 ) $ ( 0.05 ) The weighted-average number of OP Units held by non-controlling OP Unitholders was 204,778 and 126,713 for the three and six months ended June 30, 2021, respectively, and 224,940 and 256,621 for the three and six months ended June 30, 2020, respectively. NOTE 11. SUBSEQUENT EVENTS Equity Activity The following table provides information on equity sales that have occurred subsequent to June 30, 2021 (dollars in thousands, except per-share amounts): Type of Issuance Number of Shares Sold Weighted Average Offering Price Per Share Gross Proceeds Net Proceeds (1) Series C Preferred Stock (2) 169,425 $ 24.89 $ 4,217 $ 3,854 Common Stock – ATM Program 849,285 23.70 20,132 19,931 (1) Net of Selling Commissions and Dealer-Manager Fees or underwriting commissions and discounts (in each case, as applicable). (2) Excludes approximately 1405 shares issued pursuant to the DRIP. Amended Advisory Agreement On July 13, 2021, we amended the Advisory Agreement (the “Amended Advisory Agreement”), which was approved unanimously by our board of directors, including, specifically, our independent directors. The Amended Advisory Agreement revised the base management fee from an annual rate of 0.50 % ( 0.125 % per quarter) of the prior calendar quarter’s Gross Tangible Real Estate to 0.60 % ( 0.15 % per quarter). The revised base management fee is effective beginning with the fee calculations for the quarter ending September 30, 2021. All other terms of the Amended Advisory Agreement remained the same. Distributions On July 13, 2021, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock: 25 Table of Contents Issuance Record Date Payment Date Distribution per Share Series B Preferred Stock: July 23, 2021 July 30, 2021 $ 0.125 August 23, 2021 August 31, 2021 0.125 September 22, 2021 September 30, 2021 0.125 Total Series B Preferred Stock Distributions: $ 0.375 Series C Preferred Stock: July 28, 2021 August 6, 2021 $ 0.125 August 25, 2021 September 3, 2021 0.125 September 29, 2021 October 6, 2021 0.125 Total Series C Preferred Stock Distributions: $ 0.375 Series D Term Preferred Stock: July 23, 2021 July 30, 2021 $ 0.104167 August 23, 2021 August 31, 2021 0.104167 September 22, 2021 September 30, 2021 0.104167 Total Series D Term Preferred Stock Distributions: $ 0.312501 Common Stock (1) : July 23, 2021 July 30, 2021 $ 0.0451 August 23, 2021 August 31, 2021 0.0451 September 22, 2021 September 30, 2021 0.0451 Total Common Stock Distributions: $ 0.1353 (1) The same amounts paid to common stockholders will be paid as distributions on each OP Unit held by non-controlling OP Unitholders as of the above record dates. 26 Table of Contents